SEVERANCE AGREEMENT AND RELEASE

     This AGREEMENT dated January 31, 2002 is made by and between Saucony,  Inc.
(the "Company") and Arthur Rogers, Jr. (the "Employee").

     WHEREAS,  the parties wish to resolve  amicably the  Employee's  separation
from  the  Company  and  establish  the  terms  of  the   Employee's   severance
arrangement;

     NOW,  THEREFORE,  in consideration of the promises and conditions set forth
herein,  the  sufficiency of which is hereby  acknowledged,  the Company and the
Employee agree as follows:

1.   Termination  Date.  The Employee's  effective date of termination  from the
     Company is January 4, 2002 (the "Termination Date").

2.   Monetary  Consideration.  In  return  for  the  execution  of  the  instant
     Severance Agreement and Release, the Company agrees to pay the Employee Two
     Hundred and Forty-five Thousand Dollars ($245,000),  from which the Company
     may withhold all applicable  state and federal taxes, as severance pay (the
     "Severance Pay"). The Severance Pay will be paid to the Employee  bi-weekly
     over a twelve  (12)  month  period  with the  first  payment  to be paid no
     earlier than eight days after  execution of the Agreement and provided that
     the Employee has not revoked his  acceptance  of the  Agreement  during the
     seven (7) day revocation period.  Additionally,  as further  consideration,
     the Company agrees to continue the Employee's  coverage under the Company's
     group health and dental plans, for a twelve (12) month period commencing on
     the  Employee's  Termination  Date  (the  "Benefits  Period").  During  the
     Benefits  Period,  the  Company  will pay the share of the premium for such
     coverage  that is paid by the Company for active  employees who receive the
     same type of coverage.  The Employee agrees to pay his share of the premium
     ($89.90) during the Benefits Period, which shall be deducted bi-weekly from
     the Severance Pay described in this  Paragraph.  At the end of the Benefits
     Period,  the Employee may elect to continue his group health  and/or dental
     coverage  pursuant to the federal  "COBRA" law, 29 U.S.C.  ss. 1161 et seq.
     for the  remainder of the COBRA period by paying 100% of the premium for as
     long as and to the extent that the Employee remains eligible for COBRA, and
     the  Company  will  provide the  Employee  with all  necessary  information
     regarding making such an election.

3.   Employee  Release.  The Employee  hereby fully,  forever,  irrevocably  and
     unconditionally releases, remises and discharges the Company, its officers,
     directors,  stockholders,  corporate affiliates,  subsidiaries,  and parent
     companies,  agents,  employees,  and  attorneys  from  any and all  claims,
     charges,  complaints,  demands,  actions,  causes of action, suits, rights,
     debts, sums of money, costs, accounts,  reckonings,  covenants,  contracts,
     agreements, promises, doings, omissions, damages, executions,  obligations,
     liabilities,  and expenses (including  attorneys' fees and costs), of every
     kind and nature  which he ever had or has as of the date of this  Agreement
     against the  Company,  its  officers,  directors,  stockholders,  corporate
     affiliates,  subsidiaries  and  parent  companies,  agents,  employees  and
     attorneys,  arising  out of his  employment  with or  separation  from  the
     Company including, but not limited to, all employment discrimination claims
     under Title VII of the Civil  Rights Act of 1964,  42 U.S.C.  ss.  2000e et
     seq., the Age Discrimination in Employment Act, 29 U.S.C., ss. 621 et seq.,
     the Americans With Disabilities Act of 1990, 42 U.S.C.,  ss. 12101 et seq.,
     and the Massachusetts Fair Employment  Practices Act, M.G.L. c. 151B, ss. 1
     et seq.,  all as  amended,  and all claims  arising  out of the Fair Credit
     Reporting Act, 15 U.S.C. ss. 1681 et seq., the Employee  Retirement  Income
     Security  Act  of  1974  ("ERISA"),   29  U.S.C.  ss.  1001  et  seq.,  the
     Massachusetts  Civil  Rights  Act,  M.G.L.  c. 12 ss.ss.  11H and 11I,  the
     Massachusetts Equal Rights Act, M.G.L. c. 93 ss. 102 and M.G.L. c. 214, ss.
     1C, the  Massachusetts  Labor and Industries  Act,  M.G.L. c. 149, ss. 1 et
     seq.,  and the  Massachusetts  Privacy Act,  M.G.L.  c. 214, ss. 1B, all as
     amended,  and all common law claims including,  but not limited to, actions
     in tort, defamation and breach of contract, and any claim or damage arising
     out of the  Employee's  employment  with or  separation  from  the  Company
     (including  a claim for  retaliation)  under any  common  law theory or any
     federal, state or local ordinance not expressly referenced above, excepting
     only a claim for breach of this Agreement;  provided, however, that nothing
     in  this  Agreement   prevents  him  from  filing,   cooperating  with,  or
     participating in any proceeding  before the EEOC or a state Fair Employment
     Practices Agency (except that the Employee  acknowledges that he may not be
     able to recover any monetary  benefits in  connection  with any such claim,
     charge or proceeding).

4.   Company  Release.  The  Company  hereby  fully,  forever,  irrevocably  and
     unconditionally  releases,  remises and discharges the Employee,  his heirs
     and personal representatives, from any and all claims, charges, complaints,
     demands,  actions,  causes of action,  suits, rights, debts, sums of money,
     costs, accounts, reckonings,  covenants, contracts,  agreements,  promises,
     doings,  omissions,  damages,  executions,  obligations,  liabilities,  and
     expenses  (including  attorneys' fees and costs),  of every kind and nature
     which  it ever  had or has as of the  date of this  Agreement  against  the
     Employee arising out of his employment with or separation from the Company,
     including  without  limitation  all common law  claims  including,  but not
     limited to,  actions in tort,  defamation  and breach of contract,  and any
     claim or damage arising out of the Employee's employment with or separation
     from the Company  (including a claim for retaliation)  under any common law
     theory or any federal,  state or local  ordinance not expressly  referenced
     above,  excepting  only any claim  for  breach  of this  Agreement  and any
     violation  of the Employee  Patent and  Proprietary  Information  Agreement
     signed by the Employee.

5.   Non-Disclosure.   The  Employee   acknowledges   his   obligation  to  keep
     confidential  all  non-public  information  concerning the Company which he
     acquired  during the course of his employment  with the Company,  as stated
     more fully in the Employee  Patent and  Proprietary  Information  Agreement
     executed by the Employee at the inception of his  employment  which remains
     in full force and effect.

6.   Return of Company  Property.  The Employee confirms that he has returned to
     the Company all keys,  files,  records (and copies thereof),  equipment and
     other Company-owned property in his possession or control. In addition, the
     Employee  agrees to leave intact all  electronic  documents of the Company,
     including those which he developed or help develop during his employment.

7.   Non-Disparagement.  The Employee understands and agrees that as a condition
     for payment to him of the consideration  described herein, he will not make
     any  false,  disparaging  or  derogatory  statements  to any  third  party,
     including but not limited to, any media outlet,  industry group, investors,
     financial institution or current or former employee,  consultant, client or
     customer of the Company or any of its subsidiaries regarding the Company or
     any of its  subsidiaries or any of their  directors,  officers,  employees,
     agents  or   representatives   or  about  the   Company's  or  any  of  its
     subsidiaries'  business  affairs  and  financial  condition.   The  Company
     understands and agrees that it will direct those privy to the terms of this
     Agreement not to make any false,  disparaging  or derogatory  statements to
     any third party,  including but not limited to, any media outlet,  industry
     group, current or potential employer of the Employee, financial institution
     or  current  or former  employee,  consultant,  client or  customer  of the
     Company or any of its subsidiaries  regarding the Employee,  his employment
     by the Company or the circumstances of the termination of his employment by
     the Company.

8.   Non-Competition, Non-Solicitation and Non-Hire. For a period of twelve (12)
     months  following  the  Employee's  termination,  the  Employee  will  not,
     directly or indirectly:

(a)  Engage  in any  business  or  enterprise  (whether  as an  owner,  partner,
     officer, employee,  director,  investor,  lender,  consultant,  independent
     contractor  or  otherwise,  except as the holder of not more than 1% of the
     combined voting power of the outstanding  stock of a publicly held company)
     that designs,  manufactures  and/or (exclusively or primarily at wholesale)
     sells  athletic  running  shoes  and  is  competitive  with  the  Company's
     business;

(b)  Either alone or in association with others,  solicit,  divert or take away,
     or attempt to divert or to take away,  the  business or patronage of any of
     the clients,  customers or accounts,  or prospective clients,  customers or
     accounts,  of the Company which were contacted,  solicited or served by the
     Employee while he/she was employed by the Company.

(c)  Either alone or in  association  with  others,  recruit,  solicit,  hire or
     engage as an  independent  contractor,  any person who was  employed by the
     Company  or any of its  subsidiaries  at any time  during the period of the
     Employee's  employment  with the Company,  except for an  individual  whose
     employment  with the Company has been terminated for a period of six months
     or longer.

(d)  If any  restriction  set  forth in this  Section 8 is found by any court of
     competent  jurisdiction to be unenforceable because it extends for too long
     a period of time or over too great a range of  activities or in too broad a
     geographic  area, it shall be  interpreted  to extend only over the maximum
     period of time,  range of activities or geographic  area as to which it may
     be  enforceable.

(e)  The Employee acknowledges that the restrictions contained in this Agreement
     are  necessary  for the  protection  of the  business  and  goodwill of the
     Company  and are  considered  by the  Employee  to be  reasonable  for such
     purpose.  The Employee  agrees that any breach of this Agreement will cause
     the Company substantial and irrevocable damage and therefore,  in the event
     of any such  breach,  in  addition  to such  other  remedies  which  may be
     available,  the Company shall have the right to seek  specific  performance
     and injunctive  relief without posting a bond.

(f)  The  geographic  scope of this Section shall extend to anywhere the Company
     or any of its  subsidiaries  is doing  business,  has done  business or has
     plans to do business.

(g)  If the Employee violates the provisions of this Section, the Employee shall
     continue to be held by the restrictions set forth in this Section,  until a
     period  equal  to  the  period  of  restriction  has  expired  without  any
     violation.

9.   Confidentiality. To the extent permitted by law, the parties understand and
     agree that for the mutual  consideration  herein  described,  the terms and
     contents  of this  Agreement,  and the  contents  of the  negotiations  and
     discussions   resulting  in  this   Agreement,   shall  be   maintained  as
     confidential  by the  parties  hereto,  and  their  respective  agents  and
     representatives,  and none of the above  shall be  disclosed  except to the
     extent  required  by  federal  or state  law or as  otherwise  agreed to in
     writing  by  the  other  party.

10.  Nature  of  Agreement.  The  Employee  understands  and  agrees  that  this
     Agreement is a severance  agreement and does not constitute an admission of
     liability or wrongdoing on the part of the Company.

11.  Amendment.  This Agreement shall be binding upon the parties and may not be
     abandoned,  supplemented,  changed or  modified  in any  manner,  orally or
     otherwise,  except by an  instrument in writing of concurrent or subsequent
     date signed by a duly authorized representative of the parties hereto. This
     Agreement is binding upon and shall inure to the benefit of the parties and
     their  respective  agents,  assigns,   heirs,  executors,   successors  and
     administrators.

12.  Waiver of Rights.  No delay or omission by either party in  exercising  any
     rights under this Agreement  shall operate as a waiver of that or any other
     right.  A waiver or consent  given by a party on any one occasion  shall be
     effective  only in that  instance  and shall not be  construed  as a bar or
     waiver  of any  right on any  other  occasion.

13.  Validity.  Should  any  provision  of  this  Agreement  be  declared  or be
     determined by any court of competent jurisdiction to be illegal or invalid,
     the validity of the remaining  parts,  terms,  or  provisions  shall not be
     affected  thereby and said illegal or invalid part, term or provision shall
     be  deemed  not  to be a  part  of  this  Agreement.

14.  Applicable Law, Jurisdiction, Waiver of Jury Trial. This Agreement shall be
     governed by the laws of the Commonwealth of  Massachusetts,  without regard
     to conflict of laws provisions.  The parties hereby  irrevocably  submit to
     the jurisdiction of the courts of the Commonwealth of Massachusetts,  or if
     appropriate,  a federal court located in Massachusetts  (which courts,  for
     purposes of this Agreement, are the only courts of competent jurisdiction),
     over any suit,  action or other  proceeding  arising out of,  under,  or in
     connection with this Agreement or its subject  matter.  THE PARTIES FURTHER
     AGREE TO WAIVE ANY JURY TRIAL  RIGHT AND AGREE TO HAVE ANY SUIT,  ACTION OR
     OTHER  PROCEEDING  ARISING OUT OF THIS  AGREEMENT  DECIDED BY A JUDGE.

15.  Acknowledgments.   The  Employee   acknowledges  that  he  has  been  given
     twenty-one  (21)  days to  consider  this  Agreement  and that the  Company
     advised  him to  consult  with an  attorney  of his own  choosing  prior to
     signing this Agreement.  Further,  the Employee  acknowledges he may revoke
     this  Agreement  for a period of seven (7) days after the execution of this
     Agreement,  and the Agreement  shall not be effective or enforceable  until
     the  expiration  of this seven (7) day  revocation  period.

16.  Voluntary Assent. The Employee affirms that no other promises or agreements
     of any  kind  have  been  made  to or  with  him by any  person  or  entity
     whatsoever  to  cause  him to  sign  this  Agreement,  and  that  he  fully
     understands the meaning and intent of this  Agreement.  The Employee states
     and  represents  that he has had an opportunity to fully discuss and review
     the terms of this Agreement with an attorney.  The Employee  further states
     and represents that he has carefully read this  Agreement,  understands the
     contents  herein,  freely and  voluntarily  assents to all of the terms and
     conditions  hereof,  and signs his name of his own free  act.

17.  Time To Accept Offer. This offer to enter into the Severance  Agreement and
     Release (the  "Offer") will continue to remain open until January 25, 2002.
     If an executed  Agreement is not received by the Company on that date,  the
     Offer will  officially be revoked.

18.  Entire  Agreement.  This  Agreement  contains  and  constitutes  the entire
     understanding  and agreement between the parties hereto with respect to the
     severance  and  supercedes  all  previous  oral and  written  negotiations,
     agreements,  commitments,  and writings in connection therewith. Nothing in
     this Section  shall,  however,  modify,  cancel or supercede the Employee's
     obligations set forth in Section 8.

19.  Counterparts.   This  Agreement  may  be  executed  in  two  (2)  signature
     counterparts,  each of which shall constitute an original, but all of which
     taken together shall constitute but one and the same instrument.

     IN  WITNESS  WHEREOF,  all  parties  have set  their  hand and seal to this
Agreement as of the date written above.

ARTHUR ROGERS,  JR.                              SAUCONY,  INC.

/s/Arthur Rogers, Jr.                            /s/ Michael Umana
                                                 Michael Umana